The Church and the Economy: World financial system built as 'new idolatry,' cardinal tells forum

The Church and the Economy: World financial system built as 'new idolatry,' cardinal tells forum

The world financial system "has been built as a new idolatry," charged Cardinal Oscar Rodriguez Maradiaga of Tegucigalpa, Honduras, at a June 3 forum in Washington sponsored by The Catholic University of America's Institute for Policy Research & Catholic Studies.

During his keynote address, Cardinal Rodriguez issued a ringing endorsement of the church's competency to critique economic systems. Some of the church's critics ask, "What is the hierarchy of the church doing in the economy? They know nothing about the economy," Cardinal Rodriguez said in his remarks at the forum, "Erroneous Autonomy: The Catholic Case Against Libertarianism."

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The church knows about the economy because "we know about the human being," the cardinal said. "The human being was not made for the economy, but the economy was made for the human being." Pastors "smell like the sheep," he added, borrowing a phrase from Pope Francis, and said libertarians and economists could benefit by being closer to the people.

Cardinal Rodriguez was introduced by Richard Trumka, president of the AFL-CIO. Trumka, a Catholic, described during the introduction his father and grandfather's life in a coal mining company town. Workers were paid in scrip redeemable only at the "company store," he said. His dad and granddad were clubbed by the "coal and iron police" as they were chased up the steps of the Catholic church in town -- the only parcel of land not owned by the company -- for trying to start a union, until the parish pastor, crucifix in his hands, stepped between his parishioners and the police, declaring, "This is sanctuary."

Upon hearing these travails, Cardinal Rodriguez said to Trumka, "I thought you were describing the mining situation in my country in the 1900s."

Libertarian philosophy over federal budget discussions is "really distorting the debate," said the Rev. David Beckmann, president of Bread for the World, the Christian citizens' anti-hunger lobby whose headquarters, a few blocks from the Capitol, hosted the forum. Bread for the World is a member of the Circle of Protection, as is the U.S. Conference of Catholic Bishops. The "circle" is an alliance of faith-based organizations that has been pushing Congress this decade to spare the poor from the brunt of budget cuts.

However, in the fiscal year 2015 budget proposed by the House Budget Committee chairman, Rep. Paul Ryan, R-Wis., programs benefiting low-income Americans would be on the receiving end of 69 percent of the budget cuts, according to an analysis by the Center for Budget and Policy Priorities. Ryan, a Catholic, had once been an ardent follower of libertarian philosopher and author Ayn Rand, although in 2012 he rejected Rand's philosophy as atheistic. But Ryan has since come under criticism from some Catholic academics for misstating Catholic social teaching when issuing federal budget proposals.

Libertarians argue for maximum individual autonomy and freedom of choice, emphasizing political freedom, voluntary association and the primacy of individual judgment.

While dialogue between Catholics and libertarians should not be ruled out, it can be "difficult," said Meghan Clark, an assistant professor of theology and religious studies at St. John's University in New York, "because you don't share the same vocabulary."

While libertarians may say they embrace the Catholic principle of subsidiarity, which holds that decisions are best made by the smallest or least centralized competent authority, they are silent on the subject, Cardinal Rodriguez said, "when it comes to banks and corporations."

"Many of the libertarians do not read the social doctrine of the church," he added, "but now they are trembling before the Book of Piketty," a reference to French economist Thomas Piketty," whose 700-page book, "Capital in the Twenty-First Century," examining wealth inequality around the world, has become a surprise best-seller.

"Adam Smith never thought of this" when he came up with his "invisible hand" theory of the economy, Cardinal Rodriguez said. "The invisible hand has become (a) thief. That is the problem. The hand has become so invisible it started stealing everything, corruption."

Despite the ills of the current system, Cardinal Rodriguez said political action may help change it. "Politics is often regarded as a dirty game," he said. "Who else but committed Christians can clean it up?"

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John Walton

4 years 7 months ago

"The book of Piketty" is full of mistakes, selective use of data and methodological errors.

Robert Lewis

4 years 7 months ago

No, it's not. It's the author of the article in the "Financial Times" who has obfuscated the facts in attempting to contradict Piketty's immensely well-documented and verifiable statistics. And you cannot get away with calling Piketty a "socialist" or even a "communist," because, in his book, he sees no alternative to the situation that is beginning to accelerate beyond all institutional control, other than a universal "tax on wealth," about which he is well aware that it is a virtual impossibility. We are headed toward a totalitarian system benefiting an oligarchy of vast inherited wealth whose rule is ensured by militarized national police forces and whose propaganda machine is the most powerful and insidious the world has ever known. It will only end in the destruction of man's natural environment, and Piketty knows that as assuredly as the climate change scientists whom you and your ilk probably dismiss as freakish "Cassandras."

CLAIRE BANGASSER MS

4 years 7 months ago

I have found that most people who criticize Piketty's book have not read it, but just read commentaries of people who don't like what they think is in a book that they have not read either. :-)
I have not read P's book either. But I do agree that for many folks the capitalistic system is a false god. But then, we have the gods we can ...

William Atkinson

4 years 7 months ago

Not much has changed in 4500 years, Romans, Greeks, Egyptians, Persians, Aztecs, Mayans, Holy Roman Empire, British domination, and America. All these societies had corporate elete (rich) and organized slavery however you address the use of serfs to work for rich and be under their control, the church is not blameless in these times and not much has changed or will in the future until all organizations alter their desires for riches and supremacy over mankind. The Cardinal repeats what has been said for ages and eras and yet corporate mandates continue to be the reality.

Tim O'Leary

4 years 7 months ago

I am not a Libertarian and am skeptical of all grand unifying theories of humanity, including the “homo economicus” constriction by capitalism (or communism), or the evolutionary materialism of some scientists. Both systems are unable by their nature to account for the spiritual world and default to ignore or deny it. But, every rational being has to practice metaphysics and the avoidance of metaphysics just results in bad metaphysics, and defective anthropology.
Having said that, I think dialogue between capitalist economists and the Bishops would be a good thing, as both could learn something from each other.The Church hierarchy certainly has the right and duty to criticize the capitalist institutions, but their own record on governance in general and banks in particular should mean the critique is delivered from a humble perspective. In my mind, best to take a pragmatic approach and test various approaches on a small scale first to see what works. For example, France is trying a 75% income tax. Let’s see if that makes poor Frenchmen better off, increases government revenue and increases employment for the poor over the next 5-10 years there, compared to her neighbors? Latin America had great economic promise a century ago (Argentina was richer than most European countries once) but its greatest industry seems sometimes to be the maintenance of poverty.
I have not yet read Piketty and was thinking I should, before the Financial Times, which generally leans leftist, and who had access to Piketty’s raw data, reported substantial flaws in his use of the data (“including unexplained entries in his spreadsheets, cherry picking data sources and transcription errors). Two economists, from the right and the left also found miscalculations in his data: Martin Feldstein's WSJ "The numbers don't add up") and Larry Summers criticisms (Harvard, ex-Obama and Clinton Administrations).
In any case, the sheer impracticality of Piketty’s solution on its face - a global wealth tax – makes me doubt the credibility of the analysis from the start. Who on earth could administer such a thing, and get the Chinese and Russians and the Middle East to comply? It would likely shift financial power from families and individuals to a new power class of engineering bureaucrats, as happened in every Communist country. Most of the revenues would be wasted, little would go to the poor, investment incentives would dry up and the rich would just spend their money faster and more conspicuously because of a new “use or lose” mentality. I suspect that very little would go to the poor and even less to Catholic charities. And Christ would be pushed out of the mediating support systems, as is gradually happening with hospitals and schools. The law of unintended consequences seems as certain as death and taxes.
But, there is definitely something amiss in our current society, and I would be willing to support the testing of small scale alternatives to see if any work better for the poor. I remain a great fan of voluntary transfers to the poor via Christian mediating organizations and would welcome further incentives in that direction. But, maybe, the fault is not in economic systems so much as in ourselves.

Like most public writers, I was used to getting notes that were crude, crazy or even mildly threatening. Normally, I would say a quick prayer for these obviously troubled people and get on with my day. This time it felt different, precisely because the author wasn’t insulting or obviously deranged.

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